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HDB looking into civil claims made against WP town councillors

SINGAPORE — The Housing and Development Board (HDB) said yesterday it is studying the civil claims filed against several Workers’ Party (WP) town councillors — for alleged overpayments totalling S$33.7 million —and seeking advice from the Attorney-General’s Chambers on the matter.

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SINGAPORE — The Housing and Development Board (HDB) said yesterday it is studying the civil claims filed against several Workers’ Party (WP) town councillors — for alleged overpayments totalling S$33.7 million —and seeking advice from the Attorney-General’s Chambers on the matter.

Among the eight defendants being sued by an independent panel acting on behalf of the WP-run Aljunied-Hougang Town Council (AHTC) were WP Members of Parliament Mr Low Thia Khiang, Ms Sylvia Lim and Mr Pritam Singh. Denying all allegations against them for breaches of fiduciary duties, the three WP leaders said in a public statement that they will fight the lawsuit.

Speaking to reporters at Mr Low’s Meet-the-People session at Block 713 Bedok Reservoir Road last night, the WP leaders stressed that they had “acted in good faith” and in the best interests of the town council and the residents. They also welcomed the opportunity to explain to the public “why we made certain decisions at that point in time”.

The civil suit mostly relates to contracts that AHTC had awarded over several years to FM Solutions and Services (FMSS), a firm set up by two former employees at the town council.

In court papers filed last Friday, AHTC claims the town councillors “breached their duty of care and skill ... fiduciary and/or duty of care and skill in tort” in these, and other contracts.

AHTC wants the courts to rescind these contracts, which they alleged were improper for conflict of interest, and to help it recover any sums found to have been paid out improperly. The town council also pinned the blame for how the questionable arrangement arose on Mr Low and Ms Lim, and has asked them to account for any profits they had made as a result. But the pair, who have been chairman and/or vice-chairman of AHTC during the period in question, asserted that they “have not benefited a single cent”.

Law firm Tan Rajah and Cheah will represent the trio and two other WP members, Mr Chua Zhi Hon and Mr Kenneth Foo Seck Guan. AHTC are represented by Shook Lin & Bok.

In the lawsuit, AHTC questioned the circumstances leading to FMSS being appointed as AHTC’s managing agent in 2011, saying Mr Low and Ms Lim were responsible for the decision that was “so unreasonable and/or irrational that no reasonable town councillor would have made the same decision”.

Among other things, Mr Low and Ms Lim are accused of instructing Mr Danny Loh, who died last year, and his wife How Weng Fan — who are co-defendants in this suit — to set up FMSS and promising them the managing agent contract for AHTC. Mr Loh also owned FM Solutions & Integrated Services (FMSI), which provided Essential Maintenance Service Unit services to the former Hougang Town Council, and later, AHTC.

Mr Low and Ms Lim are also accused of misleading other town councillors into appointing FMSS without calling a tender, through withholding the identities of FMSS’ owners, for instance. AHTC also alleged that Mr Low and Ms Lim “set up and/or allowed” a “flawed system” that allowed improper payments to be made to FMSS. Mr Loh and Ms How were said to have approved invoices they billed to the town council themselves.

“Effectively, these interested persons had carte blanche in the town council to make payments to FMSS/FMSI, which directly and financially benefitted themselves,” the statement of claims said.

It added that the fees charged were higher than what it would have been if the town council’s previous managing agent CPG had been kept on.

Unless Mr Low and Ms Lim show that all payments to FMSS and FMSI were lawful, they should make up for the improper amounts, if not the full S$33.7 million that AHTC paid the two firms, said the town council. At the least, they should be responsible for the higher charges which FMSS levied, amounting to S$1.3 million, the town council added. Another part of the lawsuit, which was first reported by The Straits Times on Tuesday, relates to 10 construction contracts that the town councillors awarded without calling a tender for each, as required for projects costing more than S$70,000.

Instead, several of the defendants made the decision to tender for consultants to sit on a panel and assist in these projects from time to time. AHTC selected LST Architects and Design Metabolists for the panel, but the former was engaged for all 10 projects even though their fees were higher in seven instances. AHTC alleges that it paid an extra S$2.8 million as a result, and is also claiming the amount.

Under the law, MPs would lose their seats in Parliament if they were undischarged bankrupts. On whether they had concerns over this, Ms Lim said at the Meet-the-People session: “We are aware of what the law provides for. At the moment, we are focused on presenting our defence in court.”

Mr Low also dismissed suggestions that the protracted saga over the WP’s management of its town council has caused voters to lose their faith and trust in the party. He pointed to the fact that the WP successfully defended Aljunied GRC in the 2015 General Election, even though the issue was brought up by the authorities before the election and highlighted by the ruling People’s Action Party during the hustings. “But we are prepared to be judged by the people,” Mr Low said.

He also rejected the notion that his position within the party could be affected due to the lawsuit, in light of a recent leadership challenge by fellow Aljunied GRC MP Chen Show Mao.

Adding that he “(does not) really care about popularity in the first place”, Mr Low said: “A leadership challenge is a good thing — that shows that the Workers’ Party is maturing ... the worse thing that could happen is that nobody wants the leadership positions.” He told reporters: “Some of you might be worried about what happens if we lose our seats … I can tell you ... the younger generation in the Workers’ Party will be prepared to come forward to serve Singaporeans. So I’m not worried.”

A pre-trial conference has been set on August 31. ADDITIONAL REPORTING BY FARIS MOKHTAR

 

AHTC’S KEY ALLEGATIONS AGAINST FORMER EMPLOYEES AND WP TOWN COUNCILLORS

 

- Mr Low Thia Khiang and Ms Sylvia Low decided to waive the tender for a managing agent and appoint FMSS before a town council meeting set up to discuss the matter. They also misled or made false representations at the meeting to get AHTC to agree on appointing FMSS, which was paid S$33.7 million in various contracts.

- Mr Low and Ms Lim set up and/or allowed a “flawed system” of making payments to FMSS, which effectively enabled the owners Danny Loh and How Weng Fatt, who were employees of AHTC at that time, to approve invoices they billed the town council, exposing public funds to risks of erroneous payments and overpayments, among others.

- Mr Low and Ms Lim breached their fiduciary duties by failing to keep proper accounts and records of AHTC’s transactions and affairs.

- Mr Loh and Ms How failed to act honestly and in good faith in the best interest of AHTC, and did not avoid placing themselves in a position where there is a conflict between their duties to the town council and their personal interest in FMSS. They did not disclose that they were shareholders in FMSS to AHTC members.

- Ms Lim and three other town councillors — Mr Pritam Singh, Mr Chua Zhi Hon and Mr Kenneth Foo — picked a more expensive consultant in seven out of 10 projects, causing AHTC to spend an extra S$2.8 million.

- As co-signatory of cheques issued to FMSS, Ms Lim failed to properly scrutinise each payment and documents to ensure that FMSS’ work and service levels met contractual terms.

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